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CNN Larry King Live
Interview With Suze Orman; Interview With Rachael Ray
Aired September 16, 2007 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LARRY KING, HOST: Tonight, financial guru Suze Orman cuts right to the bottom line.
(BEGIN VIDEO CLIP)
SUZE ORMAN: You're a seriously rich woman.
(END VIDEO CLIP)
KING: Could you lose your home to the mortgage meltdown?
Is the stock market the smart place to stash your hard earned cash?
Will the credit crunch squeeze your retirement dreams and choke your kids' financial future?
You ask, Suze's going to answer.
And then...
(BEGIN VIDEO CLIP, COURTESY KING WORLD PRODUCTIONS)
RACHEL RAY: Nice.
How gorgeous is that?
(END VIDEO CLIP)
KING: What's cooking with Rachael Ray?"
Has multimedia superstardom changed America's kitchen sweetheart?
ORMAN: Rachael Ray dishes and takes your calls next on LARRY KING LIVE.
Good evening.
We begin an old friend and a frequent guest, Suze Orman, the personal financial expert and Emmy winning host. Her "New York Times" best-selling authors include many books, including her most recent -- "Women and Money: Owning the Power To Control Your Destiny."
Always good to see you.
We've got lots of e-mail questions for Suze tonight. King cam questions, as well. The big financial news is the mortgage meltdown.
How bad?
ORMAN: Very bad. Seriously bad. Over the next three or four years, you're going to see over two million houses go into foreclosure. And I know that a lot of people on television go, oh it's only 1 percent of this, it's not that big of a deal.
It's a big deal when many, many people have the American dream, they bought a home, now they can't afford it and now they're having to give up their homes.
KING: Why did it happen?
ORMAN: It happened because people had this dream and they thought everybody else was getting rich, I wanted to get rich. The establishment let them get mortgages that they really couldn't afford. And everybody wanted to profit, Larry. And it really melted down on them big time.
KING: So are you saying don't buy a home?
ORMAN: No, I'm not saying don't buy a home. It's -- I've always said don't buy a home if you can't afford a home. And I've always qualified it. If you didn't have at least 10 percent to put down to begin with, in my opinion, you never could afford to buy home.
KING: So no money down is stupid?
ORMAN: It was always stupid.
It's like what are people thinking?
If you don't have money to put down, you have no money in savings. If you have no money in savings, if you lose your job, how are you going to pay for your mortgage?
KING: What if the house goes up? Don't you -- don't you have equity?
ORMAN: You have equity if you can sell the house. And not everybody can always sell a house, because there's not always a buyer.
KING: Our first e-mail question is from Alice out in Texas: "I just purchased a new home and read that -- and I read that it's better to make biweekly mortgage payments than once a month payments to save on interest and reduce the length of the loan."
Is that true?
ORMAN: It is true. However, here's what's not true, my dear, Alice. When you do a biweekly payment, you are actually most likely signing up with a bank. They will charge you $300 to $400 to sign up with them and you will send in a check every two weeks rather than once a month. Every time you send in that check, the bank usually charges you $5 to do so. Now, while there are some banks that you don't have to pay any fees to do so, OK. Most of the banks are there to make money off of you.
When you do biweekly payments, you will reduce a 30-year loan down to about 24.5 years, a 15-year loan down to about 12.3 years.
However, why pay a bank to do that?
Why not just send in one extra mortgage payment a year and you will accomplish the exact same thing.
KING: Why are they charging you to take your money?
ORMAN: They charge you because it's an administrative thing. They've got to change it. They've got to keep records. So you're far better off, rather than paying a bank to do that, if you just send in one extra mortgage payment a year, you accomplish the exact same thing.
KING: All right. Give me a rule for buying a primary residence.
Always put 10 percent, at least, down.
What else?
ORMAN: So, I would put at least 10 percent down. I would never ever do what's called a piggy back loan. When you, Larry, put down less than 20 percent -- because 20 percent is a normal down payment, but when you put down less than 20 percent, most mortgage lenders require you to pay something called PMI, or private mortgage insurance. Private mortgage insurance is $45 per month for every $100,000 of a mortgage you have. So a $200,000 mortgage, you'd pay your mortgage payment plus $90 a month.
Brokers, to get around paying that PMI, came up with this idea of, hey, if all you have is 10 percent to put down, do 10 percent down, take one mortgage for 80 percent and then do a piggy back loan for another 10 percent.
However, that piggy back loan is always a home equity line of credit. And that's what got people into trouble, because as interest rates went up, the Fed funds went up, so did the interest on home equity lines.
So the way that you do it is you always buy your PMI up front.
KING: E-mail now from Elizabeth, Cincinnati: "Do you think prospective buyers should go back to the days of putting down 20 percent on a home purchase? What if you can't afford to save up that much?
ORMAN: Yes, no, I don't think you should go back to the days of 20 percent because, remember, those days of 20 percent were when houses were $100,000, $200,000. In fact, houses were $50,000.
Now that houses are $200,000, $500,000, $800,000 in some areas, where are you going to come up with 20 percent?
I don't know.
So, again, the way to do it, everybody, is at least 10 percent down. Instead of buying PMI or doing a piggy back loan, you purchase your PMI up front. It is always 1 percent of your mortgage amount. You roll that right into the mortgage and you'll be fine.
KING: Any advice on selling a home?
ORMAN: Yes, selling a home right now, depending on the area that you live in -- if you're in California, Nevada, Arizona, you know, places like that, even, you know, there is Florida -- you'd better be lowering your prices big time and not be sitting on your profits here.
KING: Not in luxury areas.
ORMAN: No. Well, you know, certain areas you're going to get it, so lower them. Other areas, such as Seattle, places like that, hey, you can still ask your price and probably get it.
KING: Would you go into the stock market now?
ORMAN: I absolutely would go into the stock market right now, as long as you had at least 10 years or longer until you needed your money. Because anything can happen at any time. And if you go in -- and that's when investing is about -- long-term. If you need your money next month, what are you doing in the stock market?
KING: Don't most people need their money?
ORMAN: No. No, not necessarily. Most people who are investing in the stock market today are usually doing it through that you're 401(k) plan and they're doing it for retirement. So, no, they don't need it right away.
KING: An e-mail from Rasa in Tucson: "My daughters are aged 19 and 22. Each have $10,000. How should they invest it?"
ORMAN: Well, are those 19- and 22-year-olds, is the 19-year-old going to have to go to college and pay for it?
Does the 22-year-old, has she gone to college and does she have student loans?
So, the first thing you want to do is everybody needs what I call a save yourself account, an emergency fund, where this money just sits there making 4.5, 5 percent interest rate. You can still get that at any bank today, and a lot of the banks are giving you that.
Why not just let it sit there for the time that want to buy a home, for when they do need emergency money?
I would just let that kind of money, believe it or not, sit there.
KING: We're on a roll, Suze.
ORMAN: You've got it.
KING: We have a King cam question. This is about establishing credit.
Watch.
LISA: Hi, Suze.
I'm Lisa. I'm a recent college graduate and I was wondering, what's the best way to build good credit?
ORMAN: The best way to build good credit is, believe it or not, to get credit cards. But whatever you do, do not charge your credit cards to the max. Credit is built and when it's built, you get something known as an FICO score. A FICO score is a three digit number that determines the interest rates that you will pay on credit cards, car loans and home mortgages. It also determines, however, if you will get a cell phone, if a landlord will rent to you, if your employer will hire you and what your car insurance premiums are going to be. The higher your FICO score, the lower your interest rates, the better everything happens in your life.
If you get a credit card and you charge it to the max, your FICO score goes down. So you might get credit cards, but whatever you do, only get credit cards and pay them off in full every month.
Do you hear me?
KING: We'll be right back with more of Suze Orman.
Her new book, "Women and Money: Owning the Power To Control Your Destiny"
This is LARRY KING LIVE.
Don't go away.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Serious signs of trouble in the real estate market.
UNIDENTIFIED FEMALE: Foreclosures rose.
UNIDENTIFIED FEMALE: Building permits drop.
UNIDENTIFIED FEMALE: And home prices, well, they are still falling.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: People are really counting on the Fed to drop interest rates, but that might not happen.
(END VIDEO CLIP)
KING: By the way, Suze and I would like to wish all of our Jewish friends a very happy new year, and we're among those friends, because we're part of the tribe.
ORMAN: What are we doing working tonight?
KING: What year is it?
Fifteen something.
ORMAN: Oh, I don't know. I'm not good with numbers.
KING: I never know the year.
ORMAN: I know.
KING: I never know the year.
Anyway, we have an e-mail question from Denise in Mitchellville, Maryland: "If you fill out a credit card application and it's approved, but during the processing time you decide you don't want it and cancel the card before it's sent to you, how will it affect your credit score?"
ORMAN: It won't hurt you at all. What hurts your FICO scores or your credit scores are when you cancel credit cards that you've have had for a very long time, because 10 percent of your FICO score is made up of your credit history. If you get a brand new card and you cancel it right away, it really is not going to hurt you that much.
KING: It's like never using it.
ORMAN: So you never used it. So that's not going to hurt you that much at all.
KING: What's the Fed going to do at the meeting next week?
ORMAN: Well, hopefully, they're going to lower at least half a percent. If they don't, I hate to see what happens in the stock market. I hate to see what happens in the economy, because the markets have absolutely priced in at least a half a percent decrease.
Although, I have to tell you, Ben boy over there is a very interesting character. So he might just lower a quarter percent.
KING: Let's take a call.
San Antonio, Texas for Suze Orman.
Hello.
UNIDENTIFIED FEMALE: Hi.
KING: Hi.
UNIDENTIFIED FEMALE: My question is, my husband died in a medical malpractice accident. I was given a settlement. So now I'm single and I make about $60,000 a year.
ORMAN: My question is, do I pay off my house?
And they offered me to buy an annuity, for which I wouldn't see anything for 12 or 13 years. And I...
ORMAN: All right, let me ask you this, how old are you right now?
UNIDENTIFIED FEMALE: I am 45.
ORMAN: Forty-five.
Are you living in a home that you plan to stay in for the rest of your life or for a long time?
UNIDENTIFIED FEMALE: No.
ORMAN: No.
UNIDENTIFIED FEMALE: No.
ORMAN: How soon before you leave?
UNIDENTIFIED FEMALE: As soon as this is settled.
ORMAN: All right, then you do not, if that is the case, you do not take this money and pay off the mortgage on your home. If you had said to me, yes, you're going to stay in that house forever, I would say absolutely pay off the mortgage on your home.
However, given that you're leaving, you are going to take this money, you are not going to get the annuity. Don't take that settlement. Take it, put the money in a money market fund that's paying you approximately 5 percent right now. You leave it there and stay safe and sound until you find a home that you want and then you move from that point.
OK?
UNIDENTIFIED FEMALE: Thank you, Suze.
KING: Another e-mail from -- thank you, dear.
Another e-mail from Susie in Hastings, New York: "In regards to working to get a better credit score, once you pay off a credit card, is it better to close the account or keep it open and just not use it?"
ORMAN: Susie, Susie, listen to me. I love your name, by the way. Never, ever, ever close down a credit card once you have paid it off.
Why? Not only are you closing down your credit history, which I said a second ago counts for 10 percent of your score. However, here is the real reason. Thirty percent of your credit score is made up of something called your debt to credit limit ratio -- how much you owe to the credit limit the credit cards have given you. If you close down a credit card, you close down your credit limit. When you close down credit limit, you actually increase your debt to credit limit ratio, which decreases your FICO score. So whatever you do, do not shut down credit cards.
KING: Keep it.
Another King cam question.
This is about investment strategies for retirement.
Watch.
Hi.
My question for you is what would be the best investment opportunity for a person in their mid-30s who have that American dream to retire early?
What should we do?
Where do we go?
ORMAN: Ooh. You go many places, truthfully. But if you qualify, a Roth IRA is the best investment retirement account you will find, bar none. A Roth IRA is where you put money after taxes -- $4,000 if you're under 50, $5,000 if you're 50 or over -- into an account where the money grows tax-free. You can take it out tax-free later on in life. You can access your original contributions any time you want without penalty. Look there.
Within a Roth IRA, you might want a dollar cost average into some exchange traded funds that invest in the stock market, such as SPDRs, Diamonds. You might even want 10 or 20 percent of your money overseas. A good place to go right now. That's a good place for you to start.
KING: E-mail from Cathy in Fort Worth: "I'm eligible for Social Security, but I'm still working. Is it wise to begin drawing Social Security at this time?"
ORMAN: It depends how old you are, my dear, Cath. If you were 65, for instance, you could be working and making any amount of money and still not get your Social Security docked. So absolutely, 65, 66 -- because depending on your ages right now is when you get full Social Security. Take it then.
However, if you're 62 years of age, you're making under about $13,000 a year, I would also take Social Security. If you're 62 making over that, wait until you're 65, because they'll penalize you.
KING: Suze Orman is the guest. Back with more moments, more e-mails and a couple more King cams, too.
By the way, tomorrow night, President Bush addresses the nation at 9:00 Eastern, 6:00 Pacific.
We will follow that -- immediately following that address. And among our guests will be Senator Barack Obama, Senator John McCain and Senator John Edwards.
We'll be right back.
(BEGIN VIDEO CLIP)
ORMAN: What are the eight qualities of a wealthy woman?
Let's start. Harmony and balance. Courage. Generosity. Happiness. Cleanliness. Inner beauty. Wisdom. These qualities all have to be working as one. If one of these qualities is missing, you will not have the wealth that you want in your life.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
KING: We're back.
Suze's new book is "Women and Money: Owning the Power To Control Your Destiny." There you see its cover.
A lot of e-mails tonight.
We thought we'd mingle the public in a lot with Suze.
An e-mail question from Gabby in Jacksonville, Florida: "I have a lot of debt, but I've cut up my credit cards and am working to change my spending habits. I want to take money out of my 401(k) to ease -- to erase the debt. Is that a good idea?"
ORMAN: Oh, Gabby, please, I'm begging you, don't do it. Don't do it. Don't do it.
Why?
Money that you've put into your 401(k) is money that you have never paid taxes on. When you take a loan from your 401(k) -- and that's the way people get money out, is they loan it -- they think they're doing a great thing because they pay themselves back with interest.
Here's the problem. You pay your money back into your 401(k) with money you have already paid taxes on.
Later on in life, when you go to take the money out again, guess what? You're going to pay taxes on that money again. You're volunteering for double taxation. Don't do it. It makes absolutely no sense to ever take a loan from a 401(k).
KING: We have another King cam question, this dealing with student loans.
Watch.
UNIDENTIFIED MALE: I'm getting letters to refinance my student loans and I don't know if that's something I should do. The letters are saying, from my bank, that if I don't refinance, that my rates will go up.
So should I refinance?
ORMAN: I'm not exactly sure the correct word there, by the way, is refinance, because what normally happens with a student loan is you consolidate it. And when you consolidate a student loan, that is when you lock in an interest rate forever.
Interest rates right now on student loans, when you get a new student loan, is 6.8 percent. Years ago, the loans were a lot less. But many years ago, the loans were a lot higher.
So depending on your situation, really, you didn't give me enough information to tell you if you should consolidate or not. But you should at least lock in a good, low interest rate if you can.
KING: Let's take a call from Arnold, Missouri.
Hello.
UNIDENTIFIED FEMALE: Hi.
Hi, Larry.
Hi, Suze.
KING: Hi.
UNIDENTIFIED FEMALE: I'm calling in behalf of a friend. The son has got an 8020.
ORMAN: Yes.
UNIDENTIFIED FEMALE: And he wants to keep his home, but his 80 per -- his major loan is an ARM loan and his loan is going to go up like about a thousand dollars.
ORMAN: Yes.
UNIDENTIFIED FEMALE: And he can't afford to do that kind of an increase.
Is there any way that he can talk to the mortgage company to keep his home so that it doesn't become part of the two million homes that are in foreclosure now?
ORMAN: Hmm. Well, what he can do is he can try to see if he can postpone it all or if the bank will work with him on any level. That's a lot about what the government is talking about right now -- will banks work with the people that they've lent money to.
But I have to tell you, an 8020 -- for those of you who don't know -- means that this is a person who bought a house with no money down. He got two loans, one for 80 percent, one for 20 percent.
The truth of the matter is both of those loans eventually will start to go up. A thousand dollars is a lot of money. Sweetheart, if I were him, I would probably either be looking to refinance and fix it at a lower interest rate, if I could -- chances are he won't be able to -- or sell the house, I'm sorry to say.
KING: Another e-mail from Alexis in New Port Richey, Florida: "I'm 46. I still have student loans, totaling about $40,000. I work two jobs. I'm trying to get those loans paid off ASAP. What's the best way to do it?"
ORMAN: Well, the question is should you really be getting -- wanting to get your loans paid off as soon as possible?
Again, remember, many student loans you are able to lock in a low interest rate. There are student loans of a few years ago that you could have locked in 2.77 percent interest. And, if you make under $50,000 a year, guess what?
Up to $2,500 a year is tax deductible. So, are you sure you want to pay off those student loans?
Some of you who have student loans at those low interest rates, you should stretch them out for as long as you possibly can and don't pay them off.
If that is the case, I'd rather see you take the money you would have used to pay off the student loans and start saving it for a down payment on a house, to put into retirement, to get yourself out of credit card debt.
However, if you're at a higher interest rate, the best way to pay it off is to get every penny you can and put it toward your student loan debt.
It's really that simple. It's not that complicated, everybody.
KING: E-mail from John in St. Louis: "Suze, my bank offers an identify theft protection plan for $12.29 a month. Would you consider this a wise investment or waste of money?"
ORMAN: Well, it depends on the company offering it, but probably it's a waste of money, because most identity theft kits out there are reactive rather than proactive -- reactive meaning once they see something has happened to your FICO score or on your credit report, that's when they actually notify you that something's gone wrong and your identity has already been stolen.
If I were you, the easiest way to protect your identity -- and it won't cost you much to do so -- is just simply -- and every single person can do it -- put a fraud flag on your three credit reports. And that way they have to tell you anyway when somebody's taken, you know, are applying for credit for you. That's the best way to do it.
KING: One more call.
Aventura, Florida, hello.
UNIDENTIFIED FEMALE: Good evening, Larry.
KING: Hi.
UNIDENTIFIED FEMALE: (INAUDIBLE).
Happy new year.
KING: The same to you.
UNIDENTIFIED FEMALE: And I'd like to speak to (INAUDIBLE)...
KING: What's the question?
UNIDENTIFIED FEMALE: My question is, I have a private mortgage.
ORMAN: Yes.
UNIDENTIFIED FEMALE: And I pay 9 percent interest...
ORMAN: Yes.
UNIDENTIFIED FEMALE: ...for 15 years.
What could I do or who could I go to, to get a mortgage privately, you know, from a bank where I don't have to pay 9 percent?
My FICO score is 640.
ORMAN: Well, your FICO score -- the highest FICO score range is 760 to 850. A 640 FICO score currently is not a good FICO score. And given the credit crunch that we're going through, banks right now are looking for borrowers who have a FICO score of 700 or above, and they have some money to put down.
So you might not be able to get a loan right now.
Do you have money or equity in that home?
UNIDENTIFIED FEMALE: I do.
ORMAN: You do?
So what you should do is you can go onto many of the online companies, such as LendingTree.com. You might want to go onto Lending Tree -- I have no connection with them whatsoever -- where you just simply go on, put in the information and see if you are qualified for a loan.
KING: Are you...
ORMAN: And if you are, then you know where to go.
KING: All right, we are almost out of time.
Are you optimistic?
ORMAN: I am optimistic.
Listen, do I think that the economy is in trouble?
Somewhat.
Do I think a lot of personal people are in trouble?
Absolutely.
Do I think we're going to get through this?
Yes.
Is it going to be easy?
No.
KING: Thank you, doll.
ORMAN: Thanks.
Happy new year, Larry.
KING: The same to you, dear.
Suze Orman. The new book is "Women and Money: Owning the Power To Control Your Destiny."
Rachel Ray of kitchen fame is next.
Don't go away.
(BEGIN VIDEO CLIP, COURTESY KING WORLD PRODUCTIONS)
RAY: A little bit of butter because everything's better with butter. I was really just killing time, chopping time. Ha-ha.
Look, how good does that look?
How good does that look, kids?
How gorgeous is that?
(END VIDEO CLIP) (COMMERCIAL BREAK)
KING: We now welcome Rachael Ray, a return visit to LARRY KING LIVE. She is kicking off her second season in syndication, very successful, too. A "The New York Times" best selling cookbook author and as well as syndicating, she's also one of the superstars of the Food Network and reminds us that the year is 5767 in the Jewish new year.
Are you surprised at how well the show's done?
RACHAEL RAY, CHEF: You know, we were so busy just going to work every day and trying to build something that we loved and believed in, none of us, not one person on the staff was, you know, really looking at that until after it happened and it's wonderful. Yeah, it's terrific to be received.
KING: What surprised you?
RAY: Everything. You know? Everything. How much the viewers really have fun being a part of the show. How quickly they -- they were calling out to us and giving us great stories and giving us great feedback and just becoming a part of the whole process.
That really shocked me. You know, we had like 80,000 people signed up for tickets within, you know, the first month of our show and now it's 110,000 or something. It's crazy.
KING: What time slot are you generally in?
RAY: A lot of mornings, a lot of mid-days, afternoons. We are happy to be anywhere at any time.
KING: We went over to get a special peek at Rachael Ray's set-up yesterday and we did a little videotape. Watch.
(BEGIN VIDEO CLIP)
KING: All right, Rachael Ray.
RAY: How you been?
KING: I'm OK.
RAY: Been eating well?
KING: I'm watching -- no.
RAY: Look at you. You're too skinny.
KING: Yes, I'm not eating well. Feed me, feed me.
RAY: I will. Please welcome --
UNIDENTIFIED MALE: Music. Take it. RAY: I'm getting a sing along. I have to put my business in. This is all of the great clothes I get to wear. That's a perk, baby. Fourth outfit, now we're doing change number five. This is where we make all the food for the green rooms.
KING: Do you always cook something new every day?
RAY: Oh my gravy, yes.
KING: My gravy?
RAY: My gravy. You know how you know this is a real home, it's got a real junk drawer complete with take-out menus.
KING: This is fantastic.
RAY: Isn't it terrific? It doesn't feel like a set. It feels like a home away from home. I love it here.
(END VIDEO CLIP)
KING: Who designed that set? It is a fantastic set.
RAY: Joe Stewart, an amazing, amazing guy. But I decorated it.
KING: You never saw a blue refrigerator.
RAY: I love - our big chill it's called and we're raising money for an organization. We're having everybody sign a duplicate of that fridge, so you can go online at Charity Folks. You are on there.
KING: Now there's the downside of celebrity. You become a celebrity, a major figure. So therefore, you are the subject of tabloids.
RAY: I don't consider that a downside. I really don't.
KING: No?
RAY: No, I don't.
KING: They write about your marriage. You don't consider that a downside?
RAY: When John and I reported to be getting a divorce in the midst of it, we were having our only weekend off of the whole summer and John was making me a margarita. You know? A friend texted me, oh my god, I just heard, I'm so sorry.
If that's the only downside to the greatest life, I mean, my life is better than winning 10 lotteries. I do exactly what I would do on a day off from any other job for a living. I chat, I cook and I travel. And that's what I love to do. And I get to do the Yum-o! organization. We're trying to teach kids and their families how to cook. We're trying to feed hungry children. We're trying to fund kids to go to school. KING: All right.
RAY: But all of that wouldn't be possible without that. Who cares?
KING: Did it bug you to have to publicly deny something?
RAY: No, not at all. I mean, again, if you look at it the right way, it is kind of flattering because they must say you helped sell papers to keep writing stuff about you.
KING: Do you have any idea where it came from?
RAY: No and I don't care.
KING: Wouldn't that bother you?
RAY: You know, I was a waitress, grew up in restaurants. People gossip about each other in restaurants, in any sort of job. You can work for a factory that makes gadgets and people are going to gossip about each other. That is just human nature. So, they print it up if you happen to happen to make a living on television.
KING: How did John react?
RAY: First he was angry, then he was sad. My mother's furious. Now we act react kind of the same way. We really do laugh about it because that's all you can do. My grandfather had a great rule. My mother taught it to us as kids. You have two choices in life, and that is it. You can either laugh or you can cry. You have to really choose what you cry about. I mean, how ridiculous to cry about that.
KING: If you let the tabloid upset you.
RAY: You look silly. You just look silly. There are so many things that are truly sad going on in the world, to waste your time and energy on that is just silly.
KING: Were you surprised, though, at it? Were you surprised that you became a celebrity?
RAY: I was shocked that anybody wants to talk about me to that extent. I don't feel like a celebrity. I grew up in a service industry. I still consider myself very service oriented. You know? I still consider myself pretty much a waitress. I want to bring my customer, in this case my viewer or my reader, exactly what they want and nothing more, nothing less. I go to work. I work very hard. I always have.
I don't feel very much different in my day-to-day life and people don't treat me like a celebrity. When people come up to me, and they come to the show, they laugh, they giggle, they give me a hug. They bump me on the shoulder, they swap recipes. They talk to me like I'm like their next door neighbor, not like I'm some famous person. So I don't really think I have the same experience as people that are truly celebrities. KING: How many shows you do a day?
RAY: Of the hour-long show?
KING: Yeah.
RAY: Three or the equivalent of. Yesterday, the day you were there, we taped from five different episodes in one day.
KING: You do one thing in one and one in another?
RAY: Depends on people's schedules. We try to accommodate, and that's not just celebrities. Sometimes moms or dads or today we had fat pets on, we care about the pets. When can the pet come to the show? So we go in and out of a lot of different outfits. But usually it's the equivalent of about three shows a day. That's so we can still make room to do the Food Network shows, because that's my great love.
KING: Are you ever confused as to what show you are in?
RAY: Hmm, not so much. I mean, they all now really thankfully for me feel like a home away from home. You know? We have done over 600-something 30-minute meals and I look forward to the same group of people every day that I go there.
Now on this show, we did 180 in our first season and we're 20- something into the next season. I look forward to seeing those people. So I know by looking at the faces of those around me where I am, but when I wake up in the morning, I can be confused. And especially during the summer when I have to do the travel show, some days or I'm on book tour, I really don't know what city I'm in for a few hours.
KING: Did you go to, by the way, Oprah's party for Barack Obama?
RAY: No. We were here working.
KING: Were you invited?
RAY: I think she knew that we were ready for the season. We had a brief e-mail chat and good will and good cheer when she was here taping for her show.
KING: Do you think her endorsement is going to help him?
RAY: I couldn't see how it could be bad for anybody.
KING: Yeah.
RAY: You know? I mean, how could that be a bad thing?
KING: It hasn't been bad for you.
RAY: Good gravy, no, absolutely not. She's always been such a -- she's a -- just this beacon and she is just this really cool, fun person and it is so neat that that can live in one person. You can be this icon and still be a really good girlfriend.
She told me before I started the show, be yourself, be true to yourself. And I did. She told when I was thinking about starting the Yum-O! thing, she said you have to give back to the world in the way that makes sense for you and as a vehicle, use something that's true to you, that's important to you and I did. She gives great advice and she is fun.
KING: Rachael Ray is our guest, her syndicated show is in its second season, a roaring success. We'll be right back.
(BEGIN VIDEO CLIP)
RAY: Come on. Like I'm saying -- you got this going on.
OPRAH WINFREY, TALK SHOW HOST: It's a new show, come on.
RAY: Who cares?
Once you get the chicken cutlets counted out, salt and pepper it on both sides.
UNIDENTIFIED FEMALE: I'm having trouble with the eight.
DR. PHIL MCGRAW, TALK SHOW HOST: What is this?
RAY: Italian seasoning in there.
MCGRAW: Are you Italian? Is it Rachael Ray-ota or what?
(END VIDEO CLIP)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
RAY: So it's season two. Yay! And then you whisk in some chicken stock. I never in a million years thought I'd look over and see Teri Hatcher in my refrigerator.
TERI HATCHER, ACTRESS: Now, what did you really see?
RAY: Right, right, right.
You have the skinny jeans on. So you brought in some of your old --
VALERIE BERTINELLI, ACTRESS: The big jeans.
RAY: What size were those?
BERTINELLI: These are fourteens, I believe.
RAY: Back in the day we set our bras on fire, it was very liberating. Let's set your pants on fire. See what it does for you.
They're gone.
(END VIDEO CLIP)
KING: We're back. I see Dr. Phil, who will be here by the way on Friday night was with you yesterday, right?
RAY: And Robin, yes, they both came in. They're coming up in some upcoming shows. He is a great host but man, isn't he a great guest?
KING: Did he cook?
RAY: He's just so much fun. He didn't cook this time. We got him out of the kitchen this time. He cooked last night. He's a very good eater, but not so much with the cook.
KING: A guest who's been with us frequently came to you recently, Bill Clinton. What was that like?
RAY: It was huge. That was the day we launched Yum-O! The Yum- O! organization has three promises.
KING: Explain Yum-O! You've mentioned it a few times.
RAY: It has three promises. We try and teach kids and their families how to cook, healthy, fun and affordable meals. And then we try to feed hungry American children to just get rid of hunger among American kids. and then we try to fund -- we want to offer a scholarship program for kids in public schools so that they can go into what used to be vocational training, you know? They don't all have to go to chef school, but if someone wants to be a dietician and they want to work in running anything in the food-related industries, we're going to help them do that.
So it's got three layers to it. And we partnered up with President Clinton's Alliance for Healthier Generation specifically on our cook level and our awareness level to try to get kids really excited about making healthy food fun for them.
And, get their families excited about it because it can be affordable and accessible. And the Alliance for Healthier Generation, that's what they're trying to do, lower the child obesity and lower the diabetes rate. But it lives in diets with the kids. The kids have to be psyched about it. You know?
KING: No one knows more about it than Clinton on childhood obesity, unbelievable.
RAY: And President Clinton is so fabulous. But he talks -- we had a number of young people there that day. When he talks to a child with the same respect that he gives an adult or a dignitary, it is wonderful to watch. He really connects and that was so moving for us to have him partner with us on that.
But you know what was most memorable that day? Was a mother who sat in the front row, she's a nighttime nurse. She works the night shift. Her husband, truck driver during the day. They have two teenage daughters. She knows she's a good mom, she knows the dad is good. She has always felt like a bad mom in one way, she couldn't get the kids to eat vegetables or to eat a healthy diet.
She felt this huge guilt about it. And we made a simple, easy, easy meal that she could roll over into two other meals. And she was so grateful with this little bit of information about how to make her kids' food and the girls were there and they said we would eat that. She was doing it and stirring it and cutting and chopping. Tears poured down her face and that to me was the single most important moment of my life. Everything I had done that moment made it cool.
KING: Where did Yum-O! come from?
RAY: It's the word that when little kids see me in the street or they come to a book signing and see me, Rachael Ray, Yum-O!
KING: Didn't you have to say it first?
RAY: It's a -- it's an ism of mine.
KING: From childhood?
RAY: No. I think it came from working at Food Network. I was tasting stuff and would just talk to myself alone.
KING: And say Yum-O!
RAY: And it was yum combined with oh my gosh.
KING: Rachael Ray is our guest, back with more in a couple of moments.
One of those moments will be spent going to Iraq where Anderson Cooper stand by. He will host "A.C. 360" at the top of the hour. Anderson, what is up?
ANDERSON COOPER, CNN ANCHOR: Hey, Larry. We are going to actually start tonight with breaking news hitting close to home. A dangerous storm off the coast of Texas, Humberto could be a hurricane before it hits land tonight. Tonight, we're going to have the latest information just in from the National Hurricane Center.
Also tonight, America's top general floated a plan when he spoke to Congress this week -- 30,000 soldiers home by next summer. Is it enough, however? Leading members of Congress seem to want more, be they Democrat or Republican. They're wondering aloud today when will the war end? How will the war end?
Tonight I will ask General Petraeus himself for his reaction. He's on the program. Also, the prime minister of Iraq is on the program, Nouri al-Maliki. Live from Baghdad at the top of the hour, Larry.
KING: Quite a lineup, coming up at 10 Eastern, 7 Pacific. And as we go to break, a little test. How well do you know Rachael Ray? Here's the question. One of Rachel's favorite ingredients is something she called EVOO. What is EVOO? Is it onions - A, onions, B, vinegar or C, oil? The answer and more with Rachael Ray when LARRY KING LIVE returns.
Coming up on LARRY KING LIVE tomorrow night, the president addresses the nation on Iraq at 9:00. We'll have immediate reaction with White House candidates Barack Obama, John McCain and John Edwards.
And then Friday night, Dr. Phil, Emmy host Ryan Seacrest and more. All the rest of this week on LARRY KING LIVE.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
RAY: Put a little EVOO in the bottom for the burgers. A little EVOO. I'm going to wipe the pan out and heat up a little more EVOO.
(END VIDEO CLIP)
KING: OK, A, vinegar, B, onions, C, oil? What is EVOO?
RAY: Extra virgin olive oil.
KING: And why have you initialed it?
RAY: Because for all of those years and we continue on Food Network, I'm alone talking to my vegetables and I just got tired of saying extra virgin olive oil over and over and over. I abbreviated it for myself and became EVOO.
KING: What is extra virgin olive oil?
RAY: How did they check? How would you know?
KING: Ordinary virgin olive oil?
RAY: It hasn't been filtered. But frankly, the EVOO that's in the grocery stores, it doesn't have a lot of stuff floating around in it so it can come to a high cooking temperature. And grocery store quality, I always say just buy the cheapest and that will be fine to cook with.
KING: And is it healthy?
RAY: Absolutely. Gives you a shiny coat as we say.
KING: Let's take a call for Rachael Ray. New Bern, North Carolina, hello.
RAY: Hello.
CALLER: Hi, Rachael.
RAY: Hi honey, how are you? CALLER: Good. I recently got married this Saturday.
RAY: Congratulations.
CALLER: And I want to know -- thank you very much. I want to know how you and John keep the fire in your relationship regardless of what the tabloids say.
RAY: Did you marry somebody you like hanging out with? Is he your friend? Seriously, that's the way you do it. You marry somebody you're friends with bigger than everything else. I mean, John -- I fell in love with his -- his look. The first night I saw him, but I think the reason I married him is because he is a good friend.
And you know, he doesn't mind -- he doesn't mind eating dinner at 10:00 at night. I mean, we don't have all of the time I'm sure he would like us to together, down time or alone time.
He lives by the schedule that our life demands and he makes it easy for me to come home and still have the life I want and need. I really have to go home at night and make dinner and chat and have a glass of wine or I don't feel like I'm whole.
I don't feel like I got anything out of my day, so John eats a little later than he would like and sits up and chats with me, too. And you know, my mom, too. She'll get up - she likes to go to bed, early bed, early rise. She'll get up literally in the middle of the night if I can't sleep or have a great recipe idea.
And I have this wonderful network behind me that really supports my pursuit of several jobs at once. And if you married somebody that you really love, he'll -- he should be like breathing to you. You are a newlywed. He should be like breathing in and out.
KING: We have an e-mail from Erika in Van Nuys, California. How do you chop everything so finely? How can I learn to chop that?
RAY: I chop everything completely wrong compared to -- like a chef. You know? A chef will peel an onion, leave the root on, be able to cut into it a whole bunch of different ways. I hack it in half, make it flat, so I can run through it quickly. And my onion hack is the way I can chop an onion quick.
So I think you need to start with a big cutting board so you have move to groove. A very sharp, good quality knife. Keep this hand, keep your nubbers all tucked in. Keep the knife titled a little away from you and then keep chopping until you find a way that works for you best.
KING: I like chopping a lot. I like it chopped fine.
RAY: I love to chop, too. But you have to find your own groove. You have to find your own rhythm.
KING: We'll be back with our remaining moments and another call for Rachael Ray right after these words. Don't go away. (BEGIN VIDEO CLIP)
CROWD: I want to rock and roll all night.
RAY: There's nuts everywhere! So I say, --
UNIDENTIFIED MALE: Did I just say stand by?
RAY: Taping probably the equivalent of two and a half, three shows today so I'm going to run you over, my friend.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
KING: A couple more things. You are searching for a new cooking star?
RAY: This is so cool. I tell people all the time my life is just this happy accident and that anybody could be a Rachael Ray so that was the idea that we had.
Let's turn somebody into their own Rachael Ray. So we asked America, you think you can cook - as long as you're not a pro chef, you can enter. You send us your tapes. We're going to take the top peeps and bring them in and let them cook and we're going to give them a bunch of simple challenges.
And the winner is going to get a page in the magazine, in the "Every Day with Rachael Ray" magazine to share their recipes with the country and they're going to get the "What's for dinner segment" of my show. I'll be their sous chef. They can boss me around. And we're going to send them away to a cooking school vacation at the CIA school. So, great.
KING: You told me during a break, you can't make coffee?
RAY: I'm not allowed to touch the coffee maker. Yeah, I'm bad with the coffee -- very, very bad.
KING: Doesn't come out right?
RAY: It's too strong, it's too weak. I can never find the scoop. Then I use tablespoons. I don't know how many tablespoons to the water. Sometimes I forget to put the water in. Sometimes I put the water in and forget to put the coffee in. My husband won't let me near the machine. My mom won't let me near it. I make terrible coffee.
KING: And you're a great cook, except you don't bake.
RAY: I can't bake. I'm baking challenged. I tried to make my mom a cake once, it was a lemon cottage cake out it was called out of the old - I think it was a "Good Housekeeping" cookbook or something.
And it was my mother's favorite and what's what I did for my mom for presents. Kids don't have a lot of money. You want to please them. I wanted to please my mommy and I sifted four times and the thing never rose and I just cried and cried and cried and I just -- it's been bad, bad luck for me ever since.
KING: Do you think that is a specialty? Do you think a lot of cooks --
RAY: My sister is a wonderful, wonderful baker. She loves to measure. She's very patient, she's very calm. She can decorate elaborate cakes, too. I think it's just a talent like anything else. I think it's the other side of the brain. You know, from whatever it is that helps me cook.
KING: What are you best at?
RAY: Cooking. And I'm not a chef but I am a good cook. I know that. I know that it makes people happy and I know that knowing how to make a good meal for yourself, your family, the people you love will improve the quality of life for the whole of your life.
KING: You want children?
RAY: I have lots of them with Yum-O! and I have lots of them in my family. I don't think it would be a responsible thing to work as much as I do and have any of my own at least at this time.
KING: Some day?
RAY: You know, I'm getting pretty old. I'm 39. I don't know, the clock is ticking pretty loud. I don't know. I don't know, you know? You never say never. I have no immediate plans or even future plans and, you know, I don't feel that I'm unfulfilled in that area. I really love working with kids and being near them. I find them funny and introspective and just brilliant and I love to feed them and listen to them. And so, for me, through Yum-O! I get to have lots of them.
KING: You still get a kick out of going in and doing that thing every day?
RAY: Love it.
KING: Three shows, don't matter?
RAY: Love it -- luckier than winning the lottery.
KING: Audience energy still beefs you up?
RAY: Oh my god. The audience energy gives me so much energy. I think I scared people in the first season. Now I'm calming down some. I'm really losing the voice.
KING: Do you consider yourself lucky?
RAY: Hugely. One of the most fortunate people on the planet. Pretty scared if you go around again what's going to happen to me next time. I must be in for it. I don't know.
KING: Well, you're a special delight, always great having you.
RAY: Thank you so much. Thank you.
KING: Rachael Ray, she is in her second season.
A big night tomorrow on CNN. At 9:00 Eastern, President Bush will address the nation. Immediately followed by a very special edition of LARRY KING LIVE. We'll have presidential hopefuls John McCain, Barack Obama and John Edwards sharing their thoughts on the president's latest plan for Iraq. Wolf Blitzer leads off CNN's coverage with a special two-hour edition of "THE SITUATION ROOM." That starts at 7:00.
Before we close tonight, a quick reminder to check out our Web site, CNN.com/LarryKing. You can download our current podcast, President Bill Clinton. Or you can e-mail upcoming guests or participate in our quick votes. You can even sign up for our newsletter. There's no end to what you can do. It's all at CNN.com/LarryKing.
"ANDERSON COOPER 360" starts right now, live from Camp Victory from Baghdad - Anderson?
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